Practical Problem 01

The Balance Sheet of Mr. Mama, Kaka and Mr. Baba who shared profit and losses as 4:3:3 respectively.
Balance Sheet Sheet as on 31st March 2018
Liabilities	Amt `	Amt `	Assets	Amt `	Amt `
Suppliers		7,000	Cash		4,500
Loan		5,000	Sundry Debtors	5,000
General Reserve		6,250	Less : R:D:D	500	4,500
Capital Account:			Live Stock		12,500
Mama		20,000	Motor Car		4,000
Kaka		15,000	Furniture		17,500
Baba		12,250	Plant		22,500
		65,500			65,500
Kaka retires on 1^st April 2018 on the following terms.
1. The share of Kaka in Goodwill of the firm is valued at ` 2,700
2. Furniture to be depreciated by 10% and Motor Car by 12.5%
3. Live Stock to be appreciated by 10% and Plant by 20%
4. A provision of ` 2,000 to be made for a claim of compensation.
5. R.D.D. is no longer necessary.
6. The amount payable to Kaka should be transferred to his Loan A/c

IN THE BOOKS OF Partnership Firm
Dr Profit and Loss Adjustment Account Cr
Particular	Amt	Amt	Particular	Amt	Amt
To Furniture A/c		1,750	By Live Stock A/c		1,250
To Motor Car A/c		500	By Plant A/c		4,500
To Provision for Claim A/c		2,000	By R.D.D A/c or Debtors		500
To Partner’s Capital A/c :
Mama	800
Kaka	600
Baba	600	2,000
		6,250			6,250

Balance sheet of New Firm as on 1st April 2018
Liabilities	Amt	Amt	Asset	Amt	Amt
Partners Capital A/c			Goodwill		2,700
Mama	23,300		Live Stock	12,500
Baba	14,725	38,025	Add : Appreciation @ 10%	1,250	13,750
Suppliers		7,000	Motor Car	4,000
Loan		5,000	Less : Depreciation @ 12.5%	-500	3,500
Provision for Claims		2,000	Furniture	17,500
Kaka’s Loan A/c		20,175	Less : Depreciation @ 10%	-1,750	15,750
			Plant	22,500
			Add : Appreciation @ 20%	4,500	27,000
			Sundry Debtor		5,000
			Cash		4,500
		72,200			72,200